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Amazon Web Services has confirmed to The Register that it is set to build a massive cloud for the CIA. IBM, however, is still in the running, after the company's protest at the choice of Amazon was recognized by the US Government Accountability Office.

In a statement emailed to The Reg late on Friday, Amazon Web Services confirmed the existence of a contract between it and the US's Central Intelligence Agency, and reserved several barbed comments for IBM's protest. Here is the statement in full:

Providing true cloud computing services to the intelligence community requires a transformative approach with superior technology. The CIA selected AWS based on its superior technological platform which will allow the Agency to rapidly innovate while delivering the confidence and security assurance needed for mission-critical systems. The Agency conducted a very detailed, thorough procurement that took many months to award. We look forward to a fast resolution of the two issues raised by the GAO so the Agency can move forward with this important contract.

IBM also attempted to get the contract, and when it lost out it lodged protests with the government. Federal and government contracts are a huge business for IBM, and considered home turf by the company.

The AWS statement follows the US Government Accountability Office ruling on Thursday that the CIA had failed to properly evaluate the cloud prices, and recommend that the CIA reopen negotiations with the two companies, according to Bloomberg.

Though the contract could now go to IBM after another evaluation, the anointment of Amazon by the CIA in the first case represents a sea change in attitudes towards IT procurement – one that has been brewing on both sides of the Atlantic under various G-Cloud programs for years, but one that had not – until now – seen any government spend serious cash on the non-legacy cloud.

The decision by the CIA to use Amazon Web Services' technology caps off an evolution by the company from a provider of low-cost utility computing services into a fully fleshed-out enterprise provider – one whose rise poses a grave threat to legacy OEMs.

In just seven years, Amazon Web Services has developed from a simple offering of storage (S3) and compute (EC2) into a multi-headed IT services mammoth that legacy OEMs such as Microsoft and upstart tech titans such as Google have been forced to compete with.

Getting a CIA contract puts Amazon alongside the true mega-IT corporations with close ties to the US government, such as Cisco, HP – and of course, IBM.

Details of the size of the contract, which was alleged by IT gov mag FCW to be $600m, and the scope of the deal, were unavailable at the time of writing.

One thing is for sure – the news will be met with horror by executives at VMware, who just three short months ago characterized Amazon as just another bookseller, and said it was VMware's destiny to "own the corporate workload now and forever." With the deal, that statement is null and void.

Whether or not AWS gets the contract is at this point immaterial – the fact that the CIA's original choice was Amazon and not IBM, and not the other way around, is what matters.

The news of the contract follows a week packed of revelations about the alleged links between nine gigantic tech companies and the US National Security Agency via a scheme called PRISM.

But although Amazon was not one of the nine named companies, Dropbox was indicated to be coming onboard – and Dropbox uses AWS. ®